Loan from SWAMIH Fund Recognised as 'Interim Finance' Under Section 5(15) of IBC: NCLT Delhi

In a significant ruling, the New Delhi Bench of the National Company Law Tribunal (NCLT) has held that the funding extended by the Special Window for Affordable and Mid-Income Housing (SWAMIH) Fund qualifies as interim finance under Section 5(15) of the Insolvency and Bankruptcy Code, 2016 (IBC).

The bench, comprising Judicial Member Shri Manni Sankariah Shanmuga Sundaram and Technical Member Dr. Sanjeev Ranjan, passed the order in the matter of M/s Conquerent Control Systems Pvt. Ltd. vs. M/s Ansal Crown Infrabuild Pvt. Ltd. [CP (IB) No. 783 (ND)/2022] on April 17, 2025.

Background

Insolvency proceedings against M/s Ansal Crown Infrabuild Pvt. Ltd. (the Corporate Debtor) commenced on April 21, 2023. During the CIRP, SWAMIH Investment Fund, a government-backed initiative aimed at reviving stalled housing projects, submitted its claim as interim finance on May 8, 2023.

The fund had earlier disbursed capital under an agreement dated December 24, 2020 to support the final stages of the Corporate Debtor’s residential project. However, the Resolution Professional (RP) did not recognise this claim as interim finance, leading the applicant to object to the resolution plan on that ground.

Applicant’s Submissions

The applicant argued that the definition of 'interim finance' under Section 5(15) was broadened through an amendment on March 13, 2020, which introduced the phrase “and such other debt as may be notified.” This amendment was preceded by an Ordinance underscoring the importance of granting repayment priority to last-mile funding.

Further, the Central Government issued a notification on March 18, 2020, categorically recognising funds disbursed by the SWAMIH Fund as interim finance under Section 5(15) of the Code.

Based on this legislative and executive framework, the applicant maintained that its funding should be treated as interim finance and should be accorded priority in repayment.

RP’s Contentions

The RP countered that interim finance refers only to funding raised during the CIRP period. Since SWAMIH's funding predated the initiation of insolvency proceedings, the RP contended it could not qualify as interim finance.

Tribunal’s Analysis and Findings

The Tribunal undertook a conjoint reading of the IBC Amendment Act, the relevant Ordinance, and the 2020 Notification issued by the Central Government. It observed that the legislative intent was to provide repayment priority to last-mile funding, whether issued before or after the commencement of CIRP.

It emphasized that:

• The amendment expanded the scope of Section 5(15) by allowing the inclusion of other notified debts.

• The Government notification specifically recognised SWAMIH funding as interim finance.

• There is no express restriction in the Code disqualifying pre-CIRP funding from being considered interim finance if duly notified.

Highlighting the essential role of last-mile funding in ensuring project completion and maximising asset value, the Tribunal concluded that such funding is pivotal to resolution and must be prioritised in repayment.

Conclusion

The NCLT allowed the application and directed that the SWAMIH Fund’s debt be classified as 'interim finance' under Section 5(15) of the Code. Consequently, it is entitled to repayment priority under the approved resolution plan.

Case Details:

Title: M/s Conquerent Control Systems Pvt. Ltd. vs. M/s Ansal Crown Infrabuild Pvt. Ltd.

Case No.: CP (IB) No. 783 (ND)/2022

Date of Judgment: April 17, 2025

For Applicant: Sr. Adv. Krishnendu Datta, Advs. Nikhil Mehndiratta, Agastya Sen, Nidhisha Chokshi

For RP: Advs. Abhishek Anand, Karan Kohli, Ridhima Mehrotra, Rakesh Kumar, Preeti Kashyap, Ankit Sharma, Yash Dhawan, and Sunil Kumar (in person)

For SRA: Adv. Nipun Gautam